Detroit Red Wings $650 million arena, district will be built 'at the right time,' team official says

DETROIT, MI - If Detroit Red Wings owner Mike Ilitch has a timetable in mind for building a new $650 million arena and entertainment district in the city, he doesn't appear willing to tip his hand anytime soon.

"We’re going to do it at the right time and make sure that it’s done right working with all the constituents that we have to work with," said Tom Wilson, Olympia's president and CEO. "But there’s nothing to report at this point."

Joe Louis Arena's lease with the City of Detroit expired in 2010 and appears to be a team-friendly one that provides plenty of flexibility. If the Red Wings would've decided then to not inform Detroit officials of its intentions with the lease, it would've been automatically renewed for 20 years.

He's also stressed that money for the project is not coming from the financially crippled city’s general fund, nor will taxes be raised to come up with the portion of public funding for the project.

The project was first revealed to the public near the end of last year when Ilitch Holdings said that that the development hinged on passage of state legislation that allows for use of Detroit Downtown Development Authority funds.

That legislation passed in December, indicating plans could move forward.

The state legislation allows Detroit's DDA to collect up to $15 million a year for the project. According to the DEGC, the primary public funding mechanism for the project will be about $12.8 million per year in property taxes captured.

The DDA, under this deal, would contribute another $2 million each year, and Olympia Development will pay another $11.5 million annually. The three commitments would be used to retire 30-year bonds through the Michigan Strategic Fund.